Industry committee  We do. You're absolutely right, the exchange rate is a very critical price in the Canadian economy. There's no question about that, so we do pay very close attention to that, but we do not target the exchange rate. The exchange rate moves around in response to many factors. It moves around in response to commodity prices.

Industry committee  We'll be short.

Industry committee  We have no objective in mind regarding the dollar. There are always positive and negative factors influencing the dollar. Commodity prices are very high, but at the same time, the slowdown of the American economy is a negative factor for the Canadian economy and, consequently, for the Canadian dollar.

Industry committee  That's a lot in a short period of time.

Industry committee  I won't comment specifically on the decisions by the U.S. Federal Reserve, but I will remind you—and I said this when we last met—that in our projection for the Canadian economy we have a projection for the U.S. economy, and in that projection for the U.S. economy we had built in a significant degree of easing on the part of the Federal Reserve, a degree of easing beyond what they have done to date.

Industry committee  We do have an agreement in place with the government, and it is tied explicitly to our inflation target of 2%. In November 2006, the government and the Bank of Canada issued a joint statement indicating that the inflation target for the bank for the next five years would continue to be 2%, as defined by the consumer price index.

Industry committee  This one and the one before that were each for a five-year term. So this one extends to 2011.

Industry committee  First, the Bank of Canada's objective regarding inflation is to have a stable performance of the macroeconomy and a fairly substantial growth rate in jobs as well as in all the other important factors of economic performance. In 2008, the economy's growth rate will be weaker than it was last year.

Industry committee  I think you have crossed the line in terms of what a prudent central banker would comment on. It's certainly not our role to comment on specifics of fiscal policy, tax cuts versus expenditures, and so on. Our focus is very much at the macro level. Really, I can only repeat what we've said before, that from our perspective what is important is that we have a very solid, predictable, macroeconomic framework within which decisions can be made.

Industry committee  Let me answer your first question, and I'll turn to John to answer your second question. We do monitor what goes on across the regions very closely. We have regional offices across Canada. We have offices in Vancouver, Calgary, Halifax, Toronto, and Montreal. We have a group of analysts in each of these offices that each quarter actually goes out to interview companies.

Industry committee  Well let me pick up on that last point and then turn to John. I think what is important to remember here--I'll use the word “shocks”--is that these developments we are facing as an economy represent the reality of what is going on in the world economy today. You just have to go back over the last 10 to 15 years and realize the extent to which we've had a series of developments.

Industry committee  What I'm saying is that I support policies that promote the movement of resources from one sector to another in response to shocks. The more we can do to facilitate flexibility and adaptability, the better the Canadian economy will perform, the higher level of employment we'll have overall, and the stronger rates of growth we'll have.

Industry committee  That's another very good question. Let me start by going back to what we experienced in the late 1980s and early 1990s. In this country we had something like 20 years of deficit financing at all levels of government. Our public sector debt levels accumulated to a level that was actually higher than the size of our Canadian economy, and we began to see the implications of that in terms of the performance of the Canadian economy.

Industry committee  I don't think in theory there's any ideal rate of debt-to-GDP ratio. I think the track we're on is a very good track, from that point of view, and it will continue to provide that macro stability that we need.

Industry committee  Perhaps I could first mention, Mr. Carrie, that when we were here last time, I think you had posed a question with regard to net migration flows within Canada. We said we would come back on that, and we did provide the clerk with a set of tables. I just wanted to let you know that we did bring back those numbers.